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21st January 2022

Is your new year’s resolution to be more philanthropic? Have you considered charitable giving but don’t have time to manage your own foundation? Are you new to Donor Advised Funds and would like to know more? You’ve come to the right place…

Prism the Gift Fund’s (Prism’s) CEO and co-founder, Anna Josse, participated in a discussion hosted by Philanthropy Impact, exploring the benefits of Donor Advised Funds (DAFs) in the UK. Anna was joined by peers at other UK DAF providers and the conversation was chaired by Philanthropy Impact CEO, John Pepin.

 

   

 

We’re pleased to report that this webinar was the most highly attended of Philanthropy Impact’s Walk in My Shoes series so far, demonstrating the growing interest in DAFs and having an effective and efficient vehicle through which to give.

We have highlighted aspects of the conversation which provide a helpful overview of DAFs and their benefits for donors.

John Pepin – Host: DAFs are growing, and with at least 13 of them now in the UK, it is a growing phenomenon and popular one for good reason. Anna, do you want to build on what a DAF is? Is cost-saving the main priority when choosing DAFs over trusts and foundations? Is it something for the mass affluent market?

Anna Josse – Prism the Gift Fund: A DAF is a simpler alternative to creating a grant-making foundation. Given the rules and regulations of the Charity Commission, setting up a foundation or operational charity is difficult to navigate. For example, you need highly knowledgeable trustees and policies in place including safeguarding and data protection. Therefore, DAFs are growing in the UK. They can appear like foundations and can be named as the donor chooses, but they are in fact a DAF account. This gives donors the flexibility and capacity to think about their giving, without worrying about governance, compliance and due diligence.

Different DAFs have different markets. For Prism, our focus is the mid-upper end of the market. There is definitely a move to engage the mass-affluent, and I think we will see a greater effort from DAF providers to encourage more giving within this market.

Host: Anna, could you talk about how investments work with a DAF? If I put £10 million into my account, how does that get invested and distributed?

Anna: Again, it will slightly vary between different DAFs. At Prism, investments are very much donor-led and donor suggested. A donor contributes £10 million to their account, and then if they have a particular bank, wealth manager or asset manager who looks after their personal wealth, we as the DAF can work with that intermediary for their charitable investments. A client can then suggest to us the way that they would like the account to be managed, with what percentages maybe for example in equities,hedge funds etc or if they want to focus on ESG, or social investments. The beauty of a DAF is that we are basically agnostic.

To answer a question from the audience; someone has asked what the difference is between a DAF and wealth manager – we are charities, which is how our donors get Gift Aid, and tax reliefs. We provide the holding account to allow someone to get the tax relief, have a balance of funds invested, and donate all over the world.

Host: Have you seen a growth in white-labelling? This is when an existing company sets up a DAF, and the DAF handles the back office management of its charitable giving.

Anna Josse – Prism the Gift Fund: Yes, we are seeing a big increase in corporate DAFs at Prism. A corporation will likely not have the time and expertise to navigate and create their own foundation, and they don’t need to. Instead, they can ‘white-label’. DAFs are incredibly flexible, responsive machines, encouraging a person or company’s philanthropic journey.

Host: Parting thoughts?

Anna Josse – Prism the Gift Fund: We know DAFs are growing in the UK, and although we are a number of years behind America, we are definitely heading in that direction. As the UK’s philanthropic community, and the private client intermediary space become more familiar with DAFs, the advisors feel comfortable opening up the conversation around philanthropy with their clients, and offering DAFs as an effective giving vehicle. Our hope for the sector is that by understanding the many benefits of a DAF, more people will give and give more. And one always gains more than one gives!

To find out more about DAFs at Prism, get in touch with Amy today: amy@prismthegiftfund.co.uk or 020 7486 7760

 

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